Alex Meruelo, owner of the Arizona Coyotes NHL team has decided to dissolve his team. Muruelo was planning to construct a new arena in the Phoenix area and the NHL had given him five years for his rebuilding.
Meruelo, however, decided to leave Arizona a few days after a failed land deal, PHNX Sports announced Tuesday (25th June). SaharaBets is also likely to leave Arizona with this decision. As required by Arizona Law, the digital sports betting platform must be tied to the Arizona franchise. The platform was launched in 2022.
Meruelo, a Utah-based company, sold its players and the game operation in April. The rights of the Roadrunners AHL affiliate, the team name, the IP and records, as well as the AHL Roadrunners franchise, remain with Meruelo. The NHL had classified the Coyotes at that time as “inactive”. Meruelo says that he is now going to wind down the team’s operations in 30 days.
The 180-day notice requirement for operators
SaharaBets has one of the lowest sports betting performance rates in Arizona. The handle for April, which is the last month that a report on revenue was available, was $900,737. The adjusted gross gaming revenue for April was $73,556. SaharaBets is only available in Arizona, the state where Meruelo also owns SaharaBets.
Arizona Department of Gaming has stated that SaharaBets will have to give 180-day notice before closing. The ADG is not sure how to proceed, given that Muruelo wants to close down the team within one month. The agency informed iGB on Monday that they have been in contact with the Coyotes, and are “undergoing appropriate administrative processes” regarding this license.
ADG stated Tuesday it has no additional comments.
Brendan Bussmann told iGB that he had clients in Arizona and was dealing with a license for a licensee who did not yet exist. The regulator will have to find a faster way than six months to resolve this issue. I can’t imagine how they could allow an operator to continue taking bets while tethered with a franchise which does not exist.
We’re on uncharted terrain in terms of how to unravel it, because this is a very team-centric set up. The statutory requirements are unmanageable.
SaharaBets’ exit will leave behind three licences for pro-franchise operators
Arizona allows up to twenty event betting platforms. As of April 2017, 17 platforms were active. In April, eight of them were tied to professional sports franchises while nine others were tied to tribal casinos. Three licences total are available at the moment and on 8th July, ADG is opening an application window in order to grant a minimum one tribal licence and one pro sports franchise license.
If SaharaBets were to leave, the available licences for pro-teams would be increased from two to three. This licence is unlikely to be included in the agency’s July window.
Arizona law gives 10 licenses to franchises, and another 10 to tribal groups. ADG did not receive any applications in the past when there were pro-franchise licenses available. The agency appears to have already granted licences for all franchises that met the criteria. According to the law, only those teams that play at “the highest level” in a particular sport are eligible. Arizona has licensed all of its major professional teams including WNBA Phoenix Mercury, Arena Football League Arizona Rattlers and the WNBA Phoenix Mercury. Nascar and the PGA Tour also hold licences.
Redistribution of licences would require legislative action, but it could also include opening tribal compacts.
A land deal goes wrong
Meruelo walked away from NHL rights when the Arizona State Land Department canceled an auction scheduled for Thursday, 27 June. Meruelo was to purchase a parcel of 95 acres owned by Arizona State Land Department. To build the arena, Coyotes needed to have a permit for special uses. According to PHNX Sport, the state has “recently” confirmed that the permit will be required and asked for it to be submitted before the auction.
Alternatives include rezoning the land by the government.
Meruelo was given until 2023-24 to solve the arena problem. The NHL suggested that Meruelo sell the arena rights, and gave him a 5-year window to do so.
